Posted on: Tuesday, February 15, 2005

2004 was good to ERS fund

By Deborah Adamson
Advertiser Staff Writer

The pension fund for state and county employees reported an 8.92 percent return in the final three months of last year, its best performance since the quarter that ended in June 2003.

The Employees' Retirement System said assets grew to $9.22 billion in the quarter ended Dec. 31, up from $8.55 billion in the previous quarter.

For all of 2004, the pension fund recorded a 13.07 percent return, ranking it in the top 2 percent of its peer group of large public pension funds.

"The investment portfolio had another quarter of strong performance," said Kimo Blaisdell, ERS chief investment officer. "We are very excited about the steady improvement of our performance over a longer period of time, as our three-year number has risen above the median."

Over the past three years, the pension fund had an annualized return of 7.89 percent compared with a median annualized return of 7.73 percent at 45 large public pensions.

In the December quarter, a strong performance by the U.S. and international stock markets drove results, Blaisdell said.

The ERS' portfolio of U.S. stocks produced a 10.54 percent return for the quarter and 13.45 percent for the year. Its portfolio of international stocks had a 15.14 percent quarterly return and a 19.53 percent yearly return.

U.S. stocks comprise 45.77 percent of the pension fund's portfolio while international account for 19 percent.

Also helping performance was resilience in the pension fund's fixed-income investments.

U.S. fixed-income securities, or bonds, produced a 1.3 percent return in the quarter and 5.2 percent for the calendar year. International fixed-income generated an 11.15 percent return in the quarter and 12.68 percent for 2004.

The ERS serves about 99,000 government employees, retirees and their beneficiaries.

Reach Deborah Adamson at dadamson@honoluluadvertiser.com or 525-8088.